Paper is a typical cyclical commodity sector. During strong bull run in a particular sector, after a few quarters of superb numbers, usually the feeling that one gets is that this time its different and it is close to becoming a structural play. That’s when the sector enjoys peak margins, and then things start going south. Typically in paper, shortages play an important role in bumping up the cycles.
Remember the chemical cycle… Initially people got enamored by the term speciality chemicals. And then when all hell broke loose for the sector, these so called speciality chemical companies also started having margin pressures.
If you observe these cycles carefully, you can get a sense of how things are playing out and which phase of the cycle we are in. Only the sectors change, Rest psychology remains same.
@Satishmm1982 I don’t track Asahi India.
| Subscribe To Our Free Newsletter |
